A new survey of former homeowners who have walked away from their homes found
that their credit was good enough after foreclosure for the vast majority to
rent new housing and few were required to make a larger than normal deposit.
YouWalkAway.com, which counsels troubled buyers to strategically default,
found that owners and managers of rental properties regard the influx of renters
in the market due to the housing market meltdown as a boon, and many are willing
to accept potential renters even if they do not have credit scores as high as
landlords previously would have required.
Some 81 percent of foreclosed owners were able to rent and 8 percent were
even able to buy a new property despite their credit history. Only 13 percent
experienced problems renting and 18 percent said they had to put down a larger
than normal deposit in order to get a lease. Most were living in smaller
quarters than when they were homeowners.
“Rental applicants with a foreclosure are now accepted with the proper
documentation,” says Tony A. Drost, president of the National Association of
Property Managers and owner of First Rate Property Management in Boise, Idaho.
“In fact, a former homeowner with a foreclosure is one of the best tenants. They
know how to keep up and care for the home since they have previously cared for
one.”
John Bradford, owner of Park Avenue Properties in North Carolina, says, “We
are seeing a slight increase in applicants with foreclosures, and our owners are
typically open to renting to those applicants. Poor credit, caused by a
foreclosure, has very little to do with having overall good citizenship, and if
the other credit history is reasonable outside the foreclosure, then the
applicant should be considered, possibly with other requirements like an
additional month’s deposit. In the end, a credit score is just one factor in a
balanced score card approach.”
Most of the former owners would like to become homeowners again, despite
their experiences. Some 56 percent said they would buy a house again, 38 percent
within the next five years. By renting, 58 percent said they are saving 30
percent or more in housing costs.